-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BMzerExxb7/QZhvsO1Mk8EaO7z1JnFmeRC89WJ8pGPIt3pPAayybeKTVukukVr6W BNB5lDPVHal6XoFrTDpceQ== 0000950134-02-008441.txt : 20020715 0000950134-02-008441.hdr.sgml : 20020715 20020715140013 ACCESSION NUMBER: 0000950134-02-008441 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020715 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PACIFIC HOUSING FUND I CENTRAL INDEX KEY: 0000809034 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953938971 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 033-11194 FILM NUMBER: 02702740 BUSINESS ADDRESS: STREET 1: 1925 CENTURY PARK EAST STE 1900 STREET 2: C/O CENTURY PACIFIC CITY: LOS ANGELES STATE: CA ZIP: 90067 BUSINESS PHONE: 3102081888 MAIL ADDRESS: STREET 1: C/O CENTURY PACIFIC STREET 2: 1925 CENTURY PARK EAST SUITE 1900 CITY: LOS ANGELES STATE: CA ZIP: 90067 10-K 1 c70628e10vk.txt FORM 10-K FOR FISCAL YEAR END MARCH 31, 2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------- FOR THE FISCAL YEAR ENDED MARCH 31, 2002 COMMISSION FILE NUMBER 33-11194 CENTURY PACIFIC HOUSING FUND-I A CALIFORNIA LIMITED PARTNERSHIP I.R.S. EMPLOYER IDENTIFICATION NO. 95-3938971 1925 CENTURY PARK EAST, SUITE 1900, LOS ANGELES, CA 90067 REGISTRANT'S TELEPHONE NUMBER: (310) 208-1888 Securities Registered Pursuant to Section 12(b) or 12(g) of the Act: NONE Indicate by check mark whether the registrant (1) has filed all reports required to be filed with the Commission by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained in this form and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference to Part III of this Form 10-K or any amendment to this Form 10-K (X) [X] No documents are incorporated into the text by reference. Registrant's Prospectus dated April 15, 1987, as amended (the Prospectus) and the Registrant's Supplement No. 3 dated December 21, 1988 to Prospectus dated April 15, 1987 (Supplement No. 3) but only to the extent expressly incorporated by reference in Parts I through IV hereof. Capitalized terms which are not defined herein have the same meaning as in the Prospectus. TABLE OF CONTENTS PART I ITEM 1 BUSINESS 3 ITEM 2 PROPERTIES 4 ITEM 3 LEGAL PROCEEDINGS 7 ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 7 PART II ITEM 5 MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS 8 ITEM 6 SELECTED FINANCIAL DATA 8 ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS 9 ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 12 ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 12 ITEM 9 CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 12 PART III ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 13 ITEM 11 EXECUTIVE COMPENSATION 14 ITEM 12 PARTNERSHIP INTEREST OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 14 ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 14 PART IV ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES 15 SIGNATURES 16
PART I ITEM 1. BUSINESS Century Pacific Housing Fund-I (the Partnership) was formed on October 6, 1986 as a limited partnership under the laws of the State of California to invest in multi-family housing developments. The Partnership's business is to invest primarily in other limited partnerships (Operating Partnerships) that are organized for the purpose of either constructing or acquiring and operating existing affordable multi-family rental apartments that are eligible for the Low-Income Housing Tax Credit, or to a lesser extent, the Rehabilitation Tax Credit, both enacted by the Tax Reform Act of 1986 (sometimes referred to as Credits or Tax Credits). The Partnership invested in 21 properties (the properties). Each of the properties qualifies for the Low-Income Housing Tax Credit, and one property, a historic structure, qualifies for the Rehabilitation Tax Credit. All of these properties receive one or more forms of assistance from federal, state or local governments. A summary of the Partnership's objectives and a summary of the Tax Credits are provided in the Prospectus under "Investment Objectives and Policies" and "Federal Income Tax Aspects" on pages 45 and 79, respectively, and are incorporated herein by reference. In order to stimulate private investment in low and moderate income housing of the types in which the Partnership has invested, the federal government has provided investors with significant ownership incentives intended to reduce the risks and provide investors/owners with certain tax benefits, limited cash distributions and the possibility of long-term capital gains. The ownership incentives include interest subsidies, rent subsidies, mortgage insurance and other measures. However, there remains significant risks inherent in this type of housing. Long-term investments in real estate limit the ability of the Partnership to vary its portfolio in response to changing economic, financial and investment conditions, and such investments are subject to changes in economic circumstances and housing patterns, rising operating costs and vacancies, rent controls and collection difficulties, costs and availability of energy, as well as other factors which normally affect real estate values. In addition, these properties usually are rent restricted and are subject to government agency programs which may or may not require prior consent to transfer ownership. The Partnership acquired the properties by investing as the limited partner in Operating Partnerships which own the properties. As a limited partner, the Partnership's liability for obligations of the Operating Partnerships is limited to its investment. The Partnership made capital contributions to the Operating Partnerships in amounts sufficient to pay the Operating Partnerships' expenses and to reimburse the general partners for their costs incurred in forming the Operating Partnerships, if any, and acquiring the properties. For each acquisition, this typically included a cash down payment (in one or more installments), acceptance of the property's mortgage indebtedness, and execution of a Purchase Money Note in favor of the seller of the property. For a summary of the acquisition financing activities for each property, see the financial information contained under Item 2. The Partnership's primary objective is to provide Low-Income Housing Tax Credits to limited partners generally over a 10-year period. Each of the Partnership's Operating Partnerships has been allocated by the relevant state tax credit agency an amount of the Low-Income Housing Tax Credit for 10 years from the date the property is placed-in-service. The required holding period of the properties is 15 years (the Compliance Period). The properties must satisfy rent restrictions, tenant income limitations and other requirements (the Low-Income Housing Tax Credit Requirements) in order to maintain eligibility for recognition of the Low-Income Housing Tax Credit at all times during the Compliance Period. Once an Operating Partnership has become eligible for the Low-Income Housing Tax Credit, it may lose such eligibility and suffer an event of recapture if its property fails to remain in compliance with the Low-Income Housing Tax Credit Requirements. To date, none of the Operating Partnerships have suffered an event of recapture of the Low-Income Housing Tax Credit. 3 Nineteen of the twenty-one Operating Partnerships receive rental subsidy payments, including payments under Section 8 of Title II of the Housing and Community Development Act of 1974 ("Section 8"). The subsidy agreements expire at various times during and after the 15-year compliance period of the Operating Partnerships. The United States Department of Housing and Urban Development ("HUD") has issued a notice implementing provisions to renew expiring Section 8 contracts as requested by an owner, for an additional one year term at current rent levels. As of June 21, 2002, eight of the Operating Partnerships' Section 8 contracts are due to expire during 2002. The Operating Partnerships have not yet received HUD's approval of their extension requests. At the present time, the Partnership cannot reasonably predict legislative initiatives and government budget negotiations, the outcome of which could result in a reduction in funds available for the various federal and state administered housing programs including the Section 8 program. Such changes could adversely affect the future net operating income and debt structure of any or all Operating Partnerships receiving such subsidy or similar subsidies. Employees The Partnership does not employ any persons. Alternatively, the Partnership reimburses an affiliate for overhead allocation consisting primarily of payroll costs. ITEM 2. PROPERTIES As of March 31, 2002, the Partnership had acquired equity interests in the Operating Partnerships set forth in the table below. Each of the properties acquired by the Operating Partnerships receives benefits under government assistance programs. The table set forth below summarizes the properties acquired, and the purchase price, original indebtedness assumed and the government assistance programs benefitting each property. Further information concerning these Properties may be found in Supplement No. 3 to the Prospectus, pages 4 through 66, which information is incorporated herein by reference and is summarized below. 4
PROPERTY NAME, AVERAGE CASH GOVERNMENT LOCATION AND OCCUPANCY PURCHASE DOWN PURCHASE MORTGAGE RESIDUAL ASSISTANCE RENTAL UNITS 2002 PRICE PAYMENT NOTE ASSUMED NOTE PROGRAM - ------------ --------- ----------- ----------- -------- ----------- ----------- ----------------- Century Pacific Housing Partnership V (CPHP-V) - Jaycee Towers Dayton, OH Section 236 204 residential units 95% $ 5,700,000 $ 400,196 $ 16,500 $ 3,000,123 $ 2,283,181 Section 8 CPHP - VIII - Sunset Townhomes Newton, KS 50 residential units 65% 1,225,000 138,000 -- 751,905 335,095 Section 236 CPHP - XI - Continental Terrace Fort Worth, TX Section 236 200 residential units 96% 4,600,000 482,883 -- 2,609,991 1,507,126 Section 8 CPHP - XII Yale Village Houston, TX Section 236 180 residential units 98% 5,250,000 530,894 -- 3,075,000 1,644,106 Section 8 CPHP - XIII - Atlantis Virginia Beach, VA Section 236 208 residential units 99% 6,032,000 801,000 -- 2,678,416 2,552,584 Section 8 CPHP - XIV - Kings Row Houston, Tx Section 236 180 residential units 76% 3,780,000 394,213 -- 1,848,269 1,537,518 Section 8 CPHP - XV - Castle Gardens Lubbock, TX Section 236 152 residential units 82% 3,268,000 320,140 -- 1,787,613 1,160,247 Section 8 CPHP - XVI - Rockwell Villa Oklahoma City, OK Section 236 60 residential units 92% 1,235,400 129,564 -- 707,207 398,629 Section 8 CPHP - XVII - London Square Village Oklahoma City, OK Section 236 200 residential units 88% 4,214,000 414,097 -- 2,820,832 979,071 Section 8 CPHP - XVIII Ascension Towers Memphis, TN 197 residential units 90% 6,727,500 409,094 50,000 3,863,739 2,404,667 Section 236 Coleman Manor Associates Limited Partnership Baltimore, MD Section 221(d)(4) 50 residential units 96% 3,990,000(1) 1,625,000 -- 2,365,000 -- Section 8
5
PROPERTY NAME, AVERAGE CASH GOVERNMENT LOCATION AND OCCUPANCY PURCHASE DOWN PURCHASE MORTGAGE RESIDUAL ASSISTANCE RENTAL UNITS 2002 PRICE PAYMENT NOTE ASSUMED NOTE PROGRAM - ------------ --------- ----------- ----------- -------- ----------- ----------- ----------------- CPHP - XX Holiday Heights Fort Worth, TX Section 236 100 residential units 97% $ 2,200,000 $ 191,000 $ -- $ 1,120,000 $ 889,000 Section 8 CPHP - XXII Harriet Tubman Terrace Berkeley, CA Section 236 91 residential units 99% 4,732,000 593,000 -- 1,718,171 2,420,829(2) Section 8 CPHP - I - Charter House Dothan, AL 100 residential units 100% 2,146,000 195,000 -- 1,169,000 782,000 Section 236 CPHP II - VOA - Section 236 Sunset Park Section 8 Denver, CO Flexible 242 residential units 95% 6,500,000 956,000 -- 3,081,144 2,462,856 Subsidy Loan CPHP - III - Highland Section 221(d)(3) Park Section 8 Topeka, KS Flexible 200 residential units 99% 6,900,000 939,000 -- 2,024,000 3,937,000 Subsidy Loan CPHP - IV - Forest Section 236 Glen Estates Section 8 Kansas City, KS Flexible 160 residential units 97% 4,960,000 738,000 -- 2,488,000 1,734,000 Subsidy Loan CPHP - VI - Edgewood Danville, IL 150 residential units 69% 3,540,000 680,000 -- 2,359,950 500,050 Section 8 CPHP - VII - Gulfway Terrace New Orleans, LA Section 236 206 residential units 98% 5,700,000 683,000 -- 3,301,974 1,715,026 Section 8 Section 236 CPHP - IX - Wind Ridge Section 8 Wichita, KS Flexible 136 residential units 98% 3,500,000 382,000 -- 1,791,936 1,326,064 Subsidy Loan CPHP - X - Bergen Circle Springfield, MA Section 236 201 residential units 97% 12,261,000 1,768,000 -- 6,946,158 3,546,842 Section 8 ----------- ----------- -------- ----------- ----------- $98,460,900 $12,770,081 $ 66,500 $51,508,428 $34,115,891 =========== =========== ======== =========== ===========
(1) This amount represents the development cost and not the purchase price. (2) This total includes a flex subsidy loan in the amount of $185,000 and the assumption of a prior residual note in the amount of $200,000. 6 ITEM 3. LEGAL PROCEEDINGS As of June 21, 2002, there were no pending legal proceedings against the Partnership or any Operating Partnership in which it has invested. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no submissions of matters to a vote of security holders during the year ended March 31, 2002. 7 PART II ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS There is at presently no public market for the Units of limited partnership interests (the Units), and it is unlikely that any public market for the Units will develop. See the Prospectus under "Transferability of Interests" on pages 29 and 72 of the Prospectus, which information is incorporated herein by reference. The number of owners of Units as of May 31, 2002 was approximately 2,121, holding 22,315 units. As of June 21, 2002, there were no cash distributions. ITEM 6. SELECTED FINANCIAL DATA The selected financial data set forth below, insofar as they relate to each of the three years ended March 31, 2002, and as of March 31, 2002 and 2001, are derived from, and are qualified by reference to, our audited financial statements included herein and should be read in conjunction with those consolidated financial statements and the notes thereto. The selected financial data as of March 31, 2000, 1999 and 1998 and for the years ended March 31, 1999 and 1998 are derived from audited financial statements not included herein. Results for past periods are not necessarily indicative of results that may be expected for future periods.
YEAR ENDED MARCH 31, ------------------------------------------------------------------ OPERATIONS 2002 2001 2000 1999 1998 - ---------------------------- ---------- ---------- ---------- ---------- ---------- Revenues $ 400 $ 800 $ 1,000 $ 3,715 $ 1,720 Operating Expenses (80,379) (69,421) (87,407) (74,653) (72,591) Equity in Net Losses of Operating Partnerships -- (15,633) (122,245) (122,202) (134,311) ---------- ---------- ---------- ---------- ---------- Net Loss $ (79,979) $ (84,254) $ (208,652) $ (193,140) $ (205,182) ========== ========== ========== ========== ========== Net Loss per Unit of Limited Partnership Interest $ (4) $ (4) $ (9) $ (9) $ (9) ========== ========== ========== ========== ==========
March 31, -------------------------------------------------------------- FINANCIAL POSITION 2002 2001 2000 1999 1998 - ------------------ ---------- ---------- ---------- ---------- ---------- Total Assets $ 5,503 $ 9,619 $ 26,456 $ 171,816 $ 277,925 ========== ========== ========== ========== ==========
8 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS The Partnership raised $8,517,000 in equity capital during calendar year 1987 and raised an additional $13,798,000 through April 15, 1988. In late December 1987, the Partnership invested in eight Operating Partnerships, which own eight multi-family properties located in various states representing $45,507,000 of property value. During 1988, the Partnership invested in an additional 13 properties located in eight states representing $52,953,900 of property value. As of March 31, 2002, the Partnership's portfolio consists of 21 properties. The properties are located in 13 states and contain 3,267 residential units. The average occupancy level for all properties during calendar year 2001 was approximately 92% and most properties generated sufficient revenue to cover operating costs, debt service, and the funding of reserves. For a summary of the combined financial status of the Operating Partnerships and the properties, see the financial information contained under Item 14. Liquidity and Capital Resources The Partnership is currently experiencing a liquidity problem. Under the Partnership Agreement, the Partnership is entitled to receive distributions of surplus cash from the Operating Partnerships which is to provide the funds necessary for the Partnership to meet its operating costs. To date, the Operating Partnerships have not provided sufficient cash distributions to enable the Partnership to meet its current obligations. The Partnership has also incurred allocated losses from all of its Operating Partnerships to the extent of the Partnership's cash contributions and has a negative working capital. As a result of the foregoing, the Partnership has been dependent upon its general partners and affiliates for continued financial support to meet its operating costs. Management maintains that the general partners and/or affiliates, though not required to do so, will continue to fund operations of the Partnership by continuing to fund operating costs and by deferring payment of allocated overhead expenses and repayment of operating cash advances. Management believes the possibility exists that one or several Operating Partnerships may require additional capital, in addition to that previously contributed by the Partnership, to sustain operations. In such case, the source of the required capital needs may be from (i) limited reserves from the Partnership (which may include distributions received from the Operating Partnerships that would otherwise be available for distribution to partners), (ii) debt financing at the Operating Partnership level (which may not be available), or (iii) additional equity contributions from the general partner of the Operating Partnerships (which may not be available). There can be no assurance that any of these sources would be readily available to provide for possible additional capital requirements which may be necessary to sustain the operations of the Operating Partnerships. However, the Partnership is under no obligation to fund operating deficits of the Operating Partnerships in the form of additional contributions or loans. Due to the uncertainty of the continuation of the Section 8 program, management has been forced to consider several options to prepare for the possible lack of subsidy income to the Operating Partnerships. The loss of subsidy income to the Operating Partnerships will make it more difficult for the Operating Partnerships to provide sufficient cash distributions to the Partnership. Management has identified the courses of action they will take as a result of the potential changes to the Section 8 program. The plan that the Operating Partnerships follow will depend on the federal government's decision to implement the decentralization or elimination of HUD. HUD's proposed Mark-to-Market approach would create an atmosphere where the Projects would have to compete for residents in the conventional market. The following alternatives are listed as plans of action that management plans to pursue in response the HUD's actions: 9 1) HUD may transfer project control to a local Housing Authority in the form of block grants. The Housing Authority would determine the market rents based on the area market. The projects will respond to the local Housing Authority and follow their procedures and guidelines. 2) The current tenants may receive a housing voucher administered by the local Housing Authority. The projects will accept vouchers and actively seek applicants who have vouchers. The projects will also accept non-voucher residents who will pay rent amounts not to exceed the maximum rents for persons at 60% of the median income level as in compliance with Section 42 of the Internal Revenue Code (IRC). 3) If no subsidies or vouchers are given to the projects or the tenants, all rents will be raised not to exceed the maximum rents for persons at 60% of the median income level and in compliance with Section 42 of the IRC. With rental rate increases, many of the current residents will be unable to pay the higher rents, thus forcing them to move from the projects and to seek housing elsewhere. An increase in the move out rate will cause a severe cash flow strain to the project. To compensate for the loss of income and increased vacancy turnover costs, the projects will require effective marketing, competitive rental rates and possible upgrading to units and/or common areas to attract qualified applicants and maintain a low vacancy rate. 4) HUD may restructure loans in order to minimize the monthly costs to the project and reduce the chances for default. Even with reduced or eliminated payments, the project will be forced to increase rents in order to operate. 5) The final option is to buy off the HUD insured loan making the complex free from HUD's or the local Housing Authority's regulations. Contractual Obligations The Operating Partnerships' contractual cash obligations and other commercial commitments at March 31, 2002 are summarized in the following table:
Less Than Total 1 Year 1-3 Years 4-5 Years After 5 Years ------------ ------------ ------------ ------------ ------------- Mortgage payable $ 40,432,988 $ 1,757,779 $ 3,916,318 $ 4,549,094 $ 30,209,797 ============ ============ ============ ============ ============
Tax Reform Act of 1986, Omnibus Budget Reconciliation Act of 1987, Technical and Miscellaneous Revenue Act of 1988, Omnibus Budget Reconciliation Act of 1989, Omnibus Budget Reconciliation Act of 1990 and all subsequent tax acts. The Partnership is organized as a limited partnership and is a "pass through" tax entity which does not, itself, pay federal income tax. However, the partners of the Partnership, who are subject to federal income tax, may be affected by the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1987, the Technical and Miscellaneous Revenue Act of 1988, the Omnibus Budget Reconciliation Act of 1989, the Omnibus Budget Reconciliation Act of 1990 and all subsequent tax acts (collectively the Tax Acts). The Partnership will consider the effect of certain aspects of the Tax Acts on the partners when making investment decisions. The Partnership does not anticipate that the Tax Acts will have a material adverse impact on the Partnership's business operations, capital resources, plans or liquidity. 10 Results of Operations 2002 Compared to 2001 For the fiscal year ended March 31, 2002, the Partnership recorded a net loss of approximately $80,000, as compared to a net loss of approximately $84,000 for the prior fiscal year. The decrease in net loss is the result of a decrease in the Partnership's equity in net losses of the Operating Partnerships, partially offset by an increase in the Partnership's general and administrative expenses. In accordance with the equity method of accounting for limited partnership interests, the Partnership does not recognize losses from investment properties when losses exceed the Partnership's equity method basis in these properties. All of the Partnership's investments have an equity method basis of zero at March 31, 2002. In the aggregate, combined rental revenue of the Operating Partnerships increased by approximately $69,000 during the current calendar year. The average occupancy level, in total, remained relatively constant in the Operating Partnerships. The combined total expenses increased by approximately $1,400,000 in the current year primarily due to an increase in utilities, other operating expenses, and interest expense, partially offset by a decrease in repairs and maintenance. 2001 Compared to 2000 For the fiscal year ended March 31, 2001, the Partnership recorded a net loss of approximately $84,000, as compared to a net loss of approximately $209,000 for the prior fiscal year. The decrease in net loss is a result of a decrease in the Partnership's equity in net losses of the Operation Partnerships and by a decrease in the Partnership's general and administrative expenses. In accordance with the equity method of accounting for limited partnership interests, the Partnership does not recognize losses from investment properties when losses exceed the Partnership's equity method basis in these properties. All of the Partnership's investments had an equity method basis of zero at March 31, 2001. The Partnership's recorded share of the Operating Partnerships' losses in the year ended March 31, 2001 consisted of losses of approximately $16,000 from the Coleman Manor Associates Limited Partnership. In the prior fiscal year, losses of approximately $122,000 from the operations of Coleman Manor Associates Limited Partnership were recorded. In the aggregate, combined rental revenue of the Operating Partnerships decreased by approximately $81,000 in 2001. The average occupancy level decreased in twelve out of the twenty-one Operating Partnerships. The combined total expenses increased by approximately $802,000 in the current year primarily due to an increase in utilities, repairs and maintenance, and interest expense. Inflation Inflation is not expected to have a material adverse impact on the Partnership's operations during its period of ownership of the Properties. Other The Partnership's operations are not subject to any significant seasonal fluctuations. The Partnership believes it is in compliance with environmental regulations and does not anticipate material effects of continued compliance. 11 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements together with the report of the independent auditors thereon are incorporated by reference from the Registrants Financial Statements on the pages indicated in ITEM 14. ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. 12 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The Partnership has no officers or directors. Management of the Partnership is vested in Irwin Jay Deutch and Century Pacific Capital Corporation (CPCC) (the general partners). The general partners will involve themselves in the day-to-day affairs of the Partnership as required to protect the limited partners' investment and advance the Partnership's tax investment objectives. Mr. Deutch, the managing general partner, has the overall responsibility for the preparation and transmittal of periodic reports to the limited partners, preparation and filing of the Partnership's tax returns with the IRS and the appropriate state tax authorities, and the preparation and filing of reports to HUD and other government agencies. Following is biographical information on Mr. Deutch and the Executive Officers of CPCC: IRWIN JAY DEUTCH Irwin Jay Deutch, age 61, is Chairman of the Board, President, and Chief Executive Officer of Century Pacific Realty Corporation (CPRC), a general partner of the Operating Partnerships that own the Properties in which CPHF-I has invested, and its Affiliates. Mr. Deutch has been involved with low-income housing investments since 1968. He is the individual general partner in 62 private limited partnerships and two public limited partnerships investing in 209 properties, including 196 multifamily properties with 33,700 apartment units, 10 commercial projects, and 3 hotel properties. Fifty-eight of the 62 private limited partnerships have invested in affordable housing. In his capacity as general partner and officer of CPRC, he oversees the management of these partnerships and assumes overall responsibility for the development, direction, and operation of all affiliated CPRC companies. Mr. Deutch is recognized as an expert in the field of affordable housing and frequently addresses professional groups on topics of real estate investment, syndication, tax law, and the Low-Income Housing Tax Credit program. Mr. Deutch received a B.B.A. with distinction from the University of Michigan School of Business Administration in 1962 and a Juris Doctor degree with honors from the University of Michigan Law School in 1965. He is a member of the Order of the Coif. Mr. Deutch served in the Honors Program in the Office of the Chief Counsel of the Internal Revenue Service from 1965 to 1967, where he was assigned to the Interpretative Division in Washington, D.C. He attended Georgetown Law Center and received his Master of Laws degree in taxation in 1967. Mr. Deutch is a member of the State Bars of Michigan and California, as well as the American, Federal, Los Angeles, and Beverly Hills Bar Associations. KEY OFFICERS OF CPCC AND AFFILIATES ESSIE SAFAIE, age 52, is Chief Financial Officer and Chief Operating Officer of CPRC. Prior to joining CPRC in 1988, from 1985-88, he was Vice President and Chief Financial Officer of Sunrise Investments, Inc., a real estate syndication firm with $450 million of real estate under management. During this period, Mr. Safaie was also President of an affiliated property management firm, S&L Property Management, Inc., with over 12,000 residential units and 800,000 square feet of commercial office space under direct management. From 1982 to 1985, Mr. Safaie was assistant controller of Standard Management Company, builders and managers of luxury hotels, commercial offices and residential units. From 1980-1982, he served as financial officer of Diamond "M" Drilling Company. Mr. Safaie received a BA degree in Business Administration from California State University with a major in accounting. 13 CHARLES L. SCHWENNESEN, Age 56, is Executive Vice President for CPEC and is responsible for real estate acquisition and real estate financing activities. Prior to joining CPEC in 1987, he analyzed investment opportunities and was Vice President of a municipal bond underwriter. From 1977 to 1984, Mr. Schwennesen was a manager with the accounting firm of Price Waterhouse. Mr. Schwennesen is a Certified Public Accountant, holds a Juris Doctor degree, Class Rank - Top 20%, from Loyola Marymount University School of Law (May 1999), a Masters Degree in Business Administration from the UCLA Graduate School of Management (June 1976) and a B.A. degree, with honors, in mathematics from UCLA (June 1974), and is a registered NASD Principal. Mr. Schwennesen is a candidate for admission to the State Bar of California. ITEM 11. EXECUTIVE COMPENSATION The Partnership has no officers or directors. However, in connection with the operations of the Partnership and the Operating Partnerships, the general partners and their affiliates will or may receive certain fees, compensation, income and other payments which are described in the Prospectus under "Compensation, Fees and Reimbursements" on page 17, the terms of which are incorporated herein by reference. During the fiscal years ended March 31, 2002, 2001, and 2000, CPCC, a general partner of the Partnership, and CPRC, a general partner of the Operating Partnerships, earned $529,329, $526,524, and $522,326, respectively, in compensation from the Operating Partnerships and $60,000 was accrued for each fiscal year for the reimbursement for overhead allocation from Century Pacific Equity Corporation (CPEC). During fiscal year 2002, the general partners received no payments from the Operating Partnerships. ITEM 12. PARTNERSHIP INTEREST OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT No partner in the Partnership owns more than 5% of the total number of partnership interests outstanding. Irwin J. Deutch, the managing general partner, holds a one-half percent general partnership interest and C.P. Westwood Associates holds a one percent limited partnership interest. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Irwin J. Deutch is the managing general partner of the Partnership, and CPCC is also a general partner. Irwin J. Deutch is the sole Director and President of CPCC, and the stock of CPCC is solely owned by the Deutch Family Trust. Mr. Deutch is also the President, sole Director and the Deutch Family Trust is the sole stockholder of Century Pacific Realty Corporation (CPRC), the general partner of the Operating Partnerships that own the properties in which the Partnership has invested. The general partners were allocated their proportionate share of the Partnership's tax losses and allocated tax credits. CPCC and CPRC accrued certain fees for their services in managing and advising the Partnership and its business. Century Pacific Equity Corporation (CPEC), an affiliate, provides all the services and materials necessary for the operation of the Partnership and is reimbursed for actual costs. These transactions are more particularly set forth in the financial statements found under ITEM 14. 14 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) (1) Financial Statements: Independent Auditors' Report F-1 Balance Sheet as of March 31, 2002 and 2001 F-2 Statement of Operations for the Years Ended March 31, 2002, 2001 and 2000 F-3 Statement Of Partners' Equity (Deficit) for the Years Ended March 31, 2002, 2001 and 2000 F-4 Statement of Cash Flows for the Years Ended March 31, 2002, 2001 and 2000 F-5 Notes to Financial Statements F-6 (2) Financial Statement Schedules: Schedule III - Real Estate and Accumulated Depreciation of Operating Partnerships in which CPHF-I has Limited Partnership Interests F-13 and F-14 Notes to Schedule III - Real Estate and Accumulated Depreciation of Operating Partnerships in which CPHF-I has Limited Partnership Interests F-15 and F-16 Schedule IV - Mortgage Loans on Real Estate of Operating Partnerships in which CPHF-I has Limited Partnership Interests F-17 thru F-20 Notes to Schedule IV - Mortgage Loans on Real Estate of Operating Partnerships in which CPHF-I has Limited Partnership Interests F-21 All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
(3) Exhibits Not applicable (b) Reports on Form 8-K Not applicable (c) Exhibits Not applicable (d) Financial Statement Schedule Financial Statements of Coleman Manor for the Year Ended December 31, 1999 15 INDEPENDENT AUDITORS' REPORT Partners Century Pacific Housing Fund - I We have audited the accompanying balance sheet of Century Pacific Housing Fund - I as of March 31, 2002 and 2001, and the related statements of operations, partners' equity (deficit) and cash flows for each of the three years in the period ended March 31, 2002. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Century Pacific Housing Fund - I as of March 31, 2002 and 2001, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2002, in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Notes 2, 3, 4 and 5 to the financial statements, the Partnership has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans regarding these matters also are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed under Item 14 are presented for purposes of complying with the Securities and Exchange Commission's rules and are not a part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. St. Louis, Missouri June 21, 2002 F-1 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- BALANCE SHEET
MARCH 31, ---------------------------- 2002 2001 ------------ ------------ ASSETS Cash $ 569 $ 4,685 Receivable from related parties (Note 4) 4,934 4,934 Investments in Operating Partnerships (Notes 1 and 5) -- -- ------------ ------------ TOTAL ASSETS $ 5,503 $ 9,619 ============ ============ LIABILITIES AND PARTNERS' EQUITY (DEFICIT) Accounts payable and accrued expenses $ 9,285 $ 7,618 Advance from affiliate (Note 4) 62,455 62,455 Payable to related parties (Note 4) 1,080,533 1,006,337 ------------ ------------ TOTAL LIABILITIES 1,152,273 1,076,410 ------------ ------------ COMMITMENTS AND CONTINGENCIES (NOTE 6) -- -- ------------ ------------ PARTNERS' EQUITY (DEFICIT) General partners (401,658) (400,058) Limited partners, $1,000 stated value per unit, 50,000 units authorized, 22,315 units issued and outstanding (Note 2) (745,112) (666,733) ------------ ------------ TOTAL PARTNERS' EQUITY (DEFICIT) (1,146,770) (1,066,791) ------------ ------------ TOTAL LIABILITIES AND PARTNERS' EQUITY (DEFICIT) $ 5,503 $ 9,619 ============ ============
- -------------------------------------------------------------------------------- See the accompanying report letter and notes to financial statements. F-2 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS
FOR THE YEARS ENDED MARCH 31, -------------------------------------- 2002 2001 2000 ---------- ---------- ---------- REVENUES Transfer fees $ 400 $ 800 $ 1,000 ---------- ---------- ---------- EXPENSES Allocated overhead expenses - affiliate (Note 4) 60,000 60,000 60,000 Other general and administrative 20,379 9,421 27,407 ---------- ---------- ---------- TOTAL EXPENSES 80,379 69,421 87,407 ---------- ---------- ---------- LOSS BEFORE EQUITY IN NET LOSSES OF OPERATING PARTNERSHIPS (79,979) (68,621) (86,407) EQUITY IN NET LOSSES OF OPERATING PARTNERSHIPS (NOTE 5) -- (15,633) (122,245) ---------- ---------- ---------- NET LOSS $ (79,979) $ (84,254) $ (208,652) ========== ========== ========== ALLOCATION OF NET LOSS General partners $ (1,600) $ (1,685) $ (4,173) Limited partners (78,379) (82,569) (204,479) ---------- ---------- ---------- $ (79,979) $ (84,254) $ (208,652) ========== ========== ========== NET LOSS PER UNIT OF LIMITED PARTNERSHIP INTEREST (NOTE 1) $ (4) $ (4) $ (9) ========== ========== ========== AVERAGE NUMBER OF OUTSTANDING UNITS 22,315 22,315 22,315 ========== ========== ==========
- -------------------------------------------------------------------------------- See the accompanying report letter and notes to financial statements. F-3 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- STATEMENT OF PARTNERS' EQUITY (DEFICIT) FOR THE YEARS ENDED MARCH 31, 2002, 2001 AND 2000
GENERAL LIMITED PARTNERS PARTNERS TOTAL ------------ ------------ ------------ PARTNERS' EQUITY (DEFICIT) - APRIL 1, 1999 $ (394,200) $ (379,685) $ (773,885) NET LOSS (4,173) (204,479) (208,652) ------------ ------------ ------------ PARTNERS' EQUITY (DEFICIT) - MARCH 31, 2000 (398,373) (584,164) (982,537) NET LOSS (1,685) (82,569) (84,254) ------------ ------------ ------------ PARTNERS' EQUITY (DEFICIT) - MARCH 31, 2001 (400,058) (666,733) (1,066,791) NET LOSS (1,600) (78,379) (79,979) ------------ ------------ ------------ PARTNERS' EQUITY (DEFICIT) - MARCH 31, 2002 $ (401,658) $ (745,112) $ (1,146,770) ============ ============ ============ PERCENTAGE INTEREST - MARCH 31, 2002 2% 98% 100% ============ ============ ============
- -------------------------------------------------------------------------------- See the accompanying report letter and notes to financial statements. F-4 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, -------------------------------------- 2002 2001 2000 ---------- ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (79,979) $ (84,254) $ (208,652) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Equity in net losses of Operating Partnerships -- 15,633 122,245 Decrease in receivable from related parties -- -- 24,116 Increase (decrease) in accounts payable and accrued expenses 1,667 (6,151) (2,032) Decrease in advance from affiliate -- -- (13,500) Increase in payable to related parties 74,196 73,568 78,823 ---------- ---------- ---------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (4,116) (1,204) 1,000 ---------- ---------- ---------- NET INCREASE (DECREASE) IN CASH (4,116) (1,204) 1,000 CASH - BEGINNING OF PERIOD 4,685 5,889 4,889 ---------- ---------- ---------- CASH - END OF PERIOD $ 569 $ 4,685 $ 5,889 ========== ========== ==========
- -------------------------------------------------------------------------------- See the accompanying report letter and notes to financial statements. F-5 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS MARCH 31, 2002, 2001 AND 2000 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The Partnership maintains its financial records on the tax basis. Memorandum entries, while not recorded in the records of the Partnership, have been made in order to prepare the financial statements in accordance with accounting principles generally accepted in the United States of America. On August 7, 1991, management of the Partnership changed from a calendar year end to a fiscal year end of March 31 for financial reporting purposes. Accordingly, the Partnership's quarterly periods end June 30, September 30 and December 31. The Operating Partnerships, for financial reporting purposes, have a calendar year. The Partnership, as well as the Operating Partnerships, have a calendar year for income tax purposes. ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. INVESTMENTS IN OPERATING PARTNERSHIPS The Partnership uses the equity method to account for its investment in the Operating Partnerships in which it has invested (Note 5). Under the equity method of accounting, the investment is carried at cost and adjusted for the Partnership's share of the Operating Partnerships' results of operations and by cash distributions received. Equity in the loss of each Operating Partnership allocated to the Partnership is not recognized to the extent that the investment balance would become negative. Costs paid by the Partnership for organization of the Operating Partnership as well as direct costs of acquiring properties, including acquisition fees and reimbursable acquisition expenses paid to the general partner, have been capitalized as investments in Operating Partnerships. INCOME TAXES No provision has been made for income taxes in the accompanying financial statements since such taxes and/or the recapture of the Low-Income Housing Tax Credit benefits received, if any, are the liability of the individual partners. The Partnership uses the accrual method of accounting for tax purposes. - -------------------------------------------------------------------------------- See the accompanying report letter. F-6 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- Notes To Financial Statements (Continued) NET LOSS PER UNIT OF LIMITED PARTNERSHIP INTEREST Net loss per unit of limited partnership interest is calculated based upon the weighted average number of units of limited partnership interest (units) outstanding. 2. OPERATIONS Century Pacific Housing Fund-I, a California limited partnership, (the Partnership), was formed on October 6, 1986 for the purpose of raising capital by offering and selling limited partnership interests and then acquiring limited partnership interests in 21 limited partnerships (the Operating Partnerships), which acquired and operate 21 multi-family residential apartment properties (the properties). The general partners of the Partnership are Century Pacific Capital Corporation, a California corporation (CPCC), and Irwin Jay Deutch, an individual (collectively, the general partners). The general partners and affiliates of the general partners (the general partners and affiliates) have interests in the Partnership and receive compensation from the Partnership and the Operating Partnerships (Note 4). The Properties qualify for the Low-Income Housing Tax Credit established by Section 42 of the Tax Reform Act of 1986 (the Low-Income Housing Tax Credit) and one property qualifies for Historic Rehabilitation Tax Credits (collectively the Tax Credits). These properties are leveraged low-income multi-family residential complexes and receive one or more forms of assistance from federal, state or local government agencies (the Government Agencies). In July 1987, the Partnership began raising capital from sales of limited partnership interests, at $1,000 per unit, to limited partners. The Partnership authorized the issuance of a maximum of 50,000 partnership units of which 22,315 were subscribed and issued. The limited partnership interest offering closed in April 1988. The Partnership has acquired limited partnership interests ranging from 97% to 99% in the Operating Partnerships, which have invested in rental property. - -------------------------------------------------------------------------------- See the accompanying report letter. F-7 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- Notes To Financial Statements (Continued) 3. REALIZATION OF ASSETS The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Partnership as a going concern. The Partnership's Operating Partnerships have not achieved the operating results required to provide the Partnership with sufficient cash distributions to fund the Partnership's administrative costs. Additionally, as of March 31, 2002, the Partnership has incurred allocated losses from all of its Operating Partnerships to the extent of the Partnership's cash contributions. As a result of the foregoing, the Partnership is dependent upon the general partners and affiliates for continued financial support. The auditors' reports on eight of the Operating Partnerships' financial statements contained an explanatory paragraph relating to a going concern issue, of which seven concerned the expiration of the Housing Assistance Payment Contract and one concerned recurring losses of the project. These Operating Partnerships have Housing Assistance Payment Contracts with the U.S. Department of Housing and Urban Development (HUD) that are due to expire during 2002. Management has requested one year extensions for these Operating Partnerships; however, as of June 21, 2002, these extensions have not been granted. Management maintains that the general partners and affiliates, though not required to do so, will continue to fund operations by deferring payment to related parties of allocated overhead expenses, and by funding any Partnership operating costs. Unpaid allocated overhead expenses will accrue and become payable when the Operating Partnerships generate sufficient cash distributions to the Partnership to cover such expenses. The financial statements do no include any adjustments that might result from the outcome of this uncertainty. 4. TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES OF THE GENERAL PARTNERS The general partners of the Partnership are CPCC and Irwin Jay Deutch. The original limited partner of the Partnership is Westwood Associates which partners are Irwin Jay Deutch and key employees of CPCC. Century Pacific Placement Corporation (CPPC), an affiliate of the general partners, served as the broker-dealer-manager for sales of the limited partnership interests in the Partnership. Century Pacific Realty Corporation (CPRC), an affiliate of CPCC, is a general partner in each of the Operating Partnerships. The general partners have an aggregate one percent interest in the Partnership, as does the original limited partner. CPRC has a one percent interest in each of the Operating Partnerships, except for one Operating Partnership in which it has a one-half percent interest. - -------------------------------------------------------------------------------- See the accompanying report letter. F-8 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- Notes To Financial Statements (Continued) The general partners and affiliates receive compensation and reimbursement of expenses from the Partnership, as set forth in the limited partnership agreement, for their services in managing the Partnership and its business. The general partners and affiliates also receive compensation and reimbursement of expenses from the Operating Partnerships. This compensation and reimbursement includes services provided to the Partnership during its offering stage, acquisition stage, operational stage, and termination of refinancing stage. The general partners and affiliates earned the following fees for services provided to the Partnership and were entitled to reimbursement for costs incurred by the general partners and affiliates on behalf of the Partnership and the Operating Partnerships for the years ended March 31, 2002, 2001 and 2000 as follows:
2002 2001 2000 -------- -------- -------- Fees and reimbursement from the Partnership: Reimbursement for overhead allocated from Century Pacific Equity Corporation (CPEC) $ 60,000 $ 60,000 $ 60,000 -------- -------- -------- Fees and reimbursement from the Operating Partnerships Supervisory management fee (CPCC and CPRC) 152,115 152,115 152,115 Partnership management fee (CPCC and CPRC) 377,214 374,409 370,211 -------- -------- -------- 529,329 526,524 522,326 -------- -------- -------- $589,329 $586,524 $582,326 ======== ======== ========
At March 31, 2002 and 2001, payable to related parties totaling $1,080,533 and $1,006,337, respectively, consists of fees and certain general and administrative costs accrued as a non-interest bearing payable by the Partnership to the general partners and affiliates. Such fees and allocated costs have been deferred until the Partnership has sufficient cash to pay them. Receivable from related parties of $4,934 at March 31, 2002 and 2001 represents cash advances to several of the Operating Partnerships. At March 31, 2002 and 2001, CPRC was owed $62,455 for non-interest bearing, demand cash advances to the Partnership. The general partners may advance funds to the Partnership to fund operating deficits, but are not obligated to do so. Such advances shall be evidenced by a promissory note of a term no more than 12 months in length and at a rate of interest no lower than the prime rate. All such loans shall be repaid prior to any distributions of net cash flow. At March 31, 2002 and 2001, the Partnership had no outstanding advances due to the general partners. - -------------------------------------------------------------------------------- See the accompanying report letter. F-9 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- Notes To Financial Statements (Continued) 5. INVESTMENTS IN OPERATING PARTNERSHIPS At March 31, 2002 and 2001, the Partnership owned limited partnership interests in 21 Operating Partnerships, each of which has invested in a multi-family rental property. Investments in Operating Partnerships consist of the following:
2002 2001 Cash contributions to Operating Partnerships to fund purchase of beneficial interests in properties $ 15,497,467 $ 15,497,467 Cash contributions to Operating Partnerships to fund operations 6,150 6,150 Cash distribution from Operating Partnership (6,326) (6,326) Acquisition and organization costs 3,342,778 3,342,778 Equity in net losses of Operating Partnerships (18,840,069) (18,840,069) ------------ ------------ -- $ -- ============ ============
A summarized combined balance sheet as of December 31, 2001 and 2000 and statement of operations for the three years ended December 31, 2001 of the aforementioned Operating Partnerships follows: COMBINED BALANCE SHEET
2001 2000 ------------ ------------ ASSETS Cash $ 610,401 $ 956,612 Reserve for replacements 3,539,469 3,125,100 Land and buildings 52,563,444 56,156,394 Other assets 4,844,577 3,247,235 ------------ ------------ $ 61,557,891 $ 63,485,341 ============ ============ LIABILITIES AND PARTNERS' DEFICIT Notes payable $141,056,387 $133,566,140 Other liabilities 8,124,369 7,691,137 Partners' deficit (87,622,865) (77,771,936) ------------ ------------ $ 61,557,891 $ 63,485,341 ============ ============
- -------------------------------------------------------------------------------- See the accompanying report letter. F-10 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- Notes To Financial Statements (Continued) COMBINED STATEMENT OF OPERATIONS
2001 2000 1999 ------------ ------------ ------------ REVENUES Rental income $ 16,654,299 $ 16,585,661 $ 16,667,064 Other income 724,174 653,813 817,016 ------------ ------------ ------------ TOTAL REVENUES 17,378,473 17,239,474 17,484,080 ------------ ------------ ------------ EXPENSES Utilities 3,406,782 2,869,732 2,630,077 Repairs and maintenance 4,497,750 4,601,575 4,389,890 Management fees 1,297,349 1,313,219 1,320,288 Other operating expenses 6,077,221 5,402,602 5,492,192 Interest 7,992,056 7,625,813 7,179,043 Depreciation and amortization 4,328,143 4,346,112 4,345,497 ------------ ------------ ------------ TOTAL EXPENSES 27,599,301 26,159,053 25,356,987 ------------ ------------ ------------ NET LOSS $(10,220,828) $ (8,919,579) $ (7,872,907) ============ ============ ============ ALLOCATION OF LOSS Century Pacific Housing Fund - I $(10,016,411) $ (8,741,187) $ (7,715,449) General partners and other limited partners (204,417) (178,392) (157,458) ------------ ------------ ------------ $(10,220,828) $ (8,919,579) $ (7,872,907) ============ ============ ============
6. COMMITMENTS AND CONTINGENCIES The rents of the Operating Partnerships, all of which receive rental subsidy payments, including payments under Section 8 of Title II of the Housing and Community Development Act of 1974 ("Section 8") are subject to specific laws, regulations, and agreements with federal and state agencies. The subsidy agreements expire at various times during and after the 15-year compliance period of the Operating Partnerships. The United States Department of Housing and Urban Development ("HUD") has issued a notice implementing provisions to renew Section 8 contracts expiring during HUD's fiscal year 2002, where requested by an owner, for an additional one year term at current rent levels. As of June 21, 2002, eight of the Operating Partnerships' Section 8 contracts are due to expire during 2002. The Operating Partnerships have not yet received HUD's approval of their extension requests. At the present time, the Partnership cannot reasonably predict legislative initiatives and governmental budget negotiations, the outcome of which could result in a reduction in funds available for the various federal and state administered housing programs including the Section 8 program. Such changes could adversely affect the future net operating income and debt structure of any or all Operating Partnerships receiving such subsidy or similar subsidies. - -------------------------------------------------------------------------------- See the accompanying report letter. F-11 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- Notes To Financial Statements (Continued) 7. FAIR VALUE OF FINANCIAL INSTRUMENTS The following methods and assumptions were used to estimate the fair value of each class of financial instruments: CASH The carrying amount approximates fair value because of the short maturity of those instruments. RELATED PARTY RECEIVABLES The carrying amount approximates fair value because of the short-term nature of the receivables. ADVANCE FROM AFFILIATE The carrying amount approximates fair value because of the short-term nature of the advance. PAYABLE TO RELATED PARTIES The carrying amount approximates fair value because the terms of the payable are similar to currently available terms and conditions for similar instruments. - -------------------------------------------------------------------------------- See the accompanying report letter. F-12 Schedule III CENTURY PACIFIC HOUSING FUND-I - -------------------------------------------------------------------------------- REAL ESTATE AND ACCUMULATED DEPRECIATION OF OPERATING PARTNERSHIPS IN WHICH CPHF-I HAS LIMITED PARTNERSHIP INTERESTS DECEMBER 31, 2001
COST INITIAL COST TO CAPITALIZED SUBSEQUENT GROSS AMOUNT AT WHICH OPERATING PARTNERSHIP TO ACQUISITION CARRIED AT CLOSE OF YEAR ------------------------- ----------------------- ------------------------- BUILDINGS AND BUILDINGS AND BUILDINGS AND DESCRIPTION(1) ENCUMBRANCES(2) LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS - -------------- --------------- ---------- ------------- -------- ------------- ---------- ------------- Century Pacific Housing Partnership I (CPHP-I) - Charter House Dothan, Alabama $ 2,473,090 $ 179,578 $ 1,918,124 $ -- $ 182,861 $ 179,578 $ 2,100,985 CPHP-II VOA/Sunset Park, Ltd. - Sunset Park Denver, Colorado 10,081,372 803,595 5,696,405 7,305 1,218,058 810,900 6,914,463 CPHP-III - Highland Park Topeka, Kansas 13,127,800 434,475 6,465,525 251 469,561 434,726 6,935,086 CPHP-IV Forest Glen Estates Kansas City, Missouri 7,072,616 427,519 4,469,134 292 230,903 427,811 4,700,037 CPHP-VI - Edgewood Danville, Illinois 3,044,513 223,418 3,316,582 96,407 400,342 319,825 3,716,924 CPHP-VII - Gulfway Terrace New Orleans, Louisiana 6,776,501 270,343 5,429,657 237 405,274 270,580 5,834,931 CPHP-IX - Wind Ridge Wichita, Kansas 3,937,211 169,514 3,330,486 828 841,941 170,342 4,172,427 CPHP-X Bergen Circle Springfield, Massachusetts 17,114,439 901,206 11,359,794 -- 1,466,614 901,206 12,826,408 CPHP-V - Jaycee Towers Dayton, Ohio 8,759,709 599,719 5,096,481 -- 459,707 599,719 5,556,188 CPHP-VIII - Sunset Townhouses Newton, Kansas 1,528,016 50,259 1,174,741 138 148,101 50,397 1,322,842 --------------- ---------- ------------- -------- ------------- ---------- ------------- BALANCE CARRIED FORWARD 73,915,267 4,059,626 48,256,929 105,458 5,823,362 4,165,084 54,080,291 --------------- ---------- ------------- -------- ------------- ---------- -------------
LIFE UPON WHICH GROSS AMOUNT AT WHICH ACCUMULATED DEPRECIATION CARRIED AT CLOSE OF YEAR DEPRECIATION IN LATEST ------------------------ ------------- INCOME BUILDINGS AND DATE OF DATE STATEMENT IS DESCRIPTION(1) TOTAL IMPROVEMENTS CONSTRUCTION ACQUIRED COMPUTED - -------------- ------------------------ ------------- ------------ -------- ------------- Century Pacific Housing Partnership I (CPHP-I) - Charter House Dothan, Alabama $ 2,280,563 $ 1,088,266 1972 12/87 27.5 years CPHP-II VOA/Sunset Park, Ltd. - Sunset Park Denver, Colorado 7,725,363 3,473,923 1971 12/87 10 - 50 years CPHP-III - Highland Park Topeka, Kansas 7,369,812 4,673,769 1967 12/87 10 - 40 years CPHP-IV Forest Glen Estates Kansas City, Missouri 5,127,848 2,736,324 1971 12/87 40 years CPHP-VI - Edgewood Danville, Illinois 4,036,749 1,875,267 1970 12/87 27.5 years CPHP-VII - Gulfway Terrace New Orleans, Louisiana 6,105,511 3,293,896 1970 12/87 10 - 40 years CPHP-IX - Wind Ridge Wichita, Kansas 4,342,769 2,353,296 1969 12/87 10 - 40 years CPHP-X Bergen Circle Springfield, Massachusetts 13,727,614 6,710,274 1976 12/87 10 - 40 years CPHP-V - Jaycee Towers Dayton, Ohio 6,155,907 2,672,706 1970 12/88 27.5 years CPHP-VIII - Sunset Townhouses Newton, Kansas 1,373,239 781,811 1971 8/88 10 - 40 years ----------- ------------- BALANCE CARRIED FORWARD 58,245,375 29,659,532 ----------- -------------
See notes to schedule F-13 CENTURY PACIFIC HOUSING FUND-I - -------------------------------------------------------------------------------- REAL ESTATE AND ACCUMULATED DEPRECIATION OF OPERATING PARTNERSHIPS IN WHICH CPHF-I HAS LIMITED PARTNERSHIP INTERESTS DECEMBER 31, 2001
COST CAPITALIZED INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH OPERATING PARTNERSHIP ACQUISITION CARRIED AT CLOSE OF YEAR ------------------------- ----------------------- ------------------------- BUILDINGS AND BUILDINGS AND BUILDINGS AND DESCRIPTION(1) ENCUMBRANCES(2) LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS - -------------- --------------- ---------- ------------- -------- ------------- ---------- ------------- BALANCE CARRIED FORWARD $ 73,915,267 $4,059,626 $ 48,256,929 $105,458 $ 5,823,362 $4,165,084 $ 54,080,291 CPHP-XI Continental Terrace Fort Worth, Texas 6,481,922 231,946 4,368,054 1,049 786,713 232,995 5,154,767 CPHP-XII - Yale Village Houston, Texas 8,665,377 299,925 4,950,075 19,874 1,059,515 319,799 6,009,590 CPHP-XIII - Atlantis Virginia Beach, Virginia 9,285,558 520,607 5,382,387 2,861 931,849 523,468 6,314,236 CPHP-XIV - Kings Row Houston, Texas 8,080,330 193,458 3,586,542 947 925,258 194,405 4,511,800 CPHP-XV - Castle Gardens Lubbock, Texas 4,994,966 161,989 3,106,011 821 688,837 162,810 3,794,848 CPHP-XVI - Rockwell Villa Oklahoma City, Oklahoma 1,643,397 75,255 1,160,145 1,168 280,455 76,423 1,440,600 CPHP-XVII - London Square Village Oklahoma City, Oklahoma 4,976,965 203,978 4,009,000 -- 730,087 203,978 4,739,087 CPHP-XVIII - Ascension Towers Memphis, Tennessee 10,217,981 176,341 6,551,159 -- 904,315 176,341 7,455,474 Coleman Manor Associates Limited Partnership - Coleman Manor Baltimore, Maryland 2,154,663 61,281 3,384,621 -- 184,710 61,281 3,569,331 CPHP-XX - Holiday Heights Fort Worth, Texas 3,375,768 202,445 1,942,864 43,132 158,237 245,577 2,101,101 CPHP-XXII - Harriet Tubman Terrace - Berkeley, California 7,264,193 361,275 3,807,339 5,097 464,243 366,372 4,271,582 --------------- ---------- ------------- -------- ------------- ---------- ------------- $ 141,056,387 $6,548,126 $ 90,505,126 $180,407 $ 12,937,581 $6,728,533 $ 103,442,707 =============== ========== ============= ======== ============= ========== =============
LIFE UPON WHICH ACCUMULATED DEPRECIATION GROSS AMOUNT AT WHICH DEPRECIATION IN LATEST CARRIED AT CLOSE OF YEAR ------------- INCOME ------------------------ BUILDINGS AND DATE OF DATE STATEMENT IS DESCRIPTION(1) TOTAL IMPROVEMENTS CONSTRUCTION ACQUIRED COMPUTED - -------------- ------------------------ ------------- ------------ -------- ------------- BALANCE CARRIED FORWARD $ 58,245,375 $ 29,659,532 CPHP-XI Continental Terrace Fort Worth, Texas 5,387,762 2,927,006 1971 10/88 20 - 40 years CPHP-XII - Yale Village Houston, Texas 6,329,389 3,947,091 1970 8/88 20 - 40 years CPHP-XIII - Atlantis Virginia Beach, Virginia 6,837,704 3,672,123 1970 7/88 20 - 40 years CPHP-XIV - Kings Row Houston, Texas 4,706,205 2,674,659 1968 8/88 20 - 40 years CPHP-XV - Castle Gardens Lubbock, Texas 3,957,658 2,232,146 1971 7/88 15 - 40 years CPHP-XVI - Rockwell Villa Oklahoma City, Oklahoma 1,517,023 730,117 1970 7/88 27.5 years CPHP-XVII - London Square Village Oklahoma City, Oklahoma 4,943,065 2,875,062 1975 8/88 27.5 years CPHP-XVIII - Ascension Towers Memphis, Tennessee 7,631,815 3,753,391 1979 8/88 27.5 years Coleman Manor Associates Limited Partnership - Coleman Manor Baltimore, Maryland 3,630,612 1,736,036 1903 8/88 27.5 years CPHP-XX - Holiday Heights Fort Worth, Texas 2,346,678 1,241,035 1972 10/88 32 years CPHP-XXII - Harriet Tubman Terrace - Berkeley, California 4,637,954 2,159,598 1975 8/88 27.5 years ------------ ------------- $110,171,240 $ 57,607,796 ============ =============
See notes to schedule F-14 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION OF OPERATING PARTNERSHIPS IN WHICH CPHF-I HAS LIMITED PARTNERSHIP INTERESTS DECEMBER 31, 2001 NOTE 1 - DESCRIPTION OF PROPERTIES The Properties held by the Operating Partnerships in which the Partnership has invested are housing projects, primarily for families and elderly or handicapped individuals of low and moderate income. NOTE 2 - SCHEDULE OF ENCUMBRANCES
OPERATING PARTNERSHIP MORTGAGE RESIDUAL PURCHASE OTHER NAME AND PROPERTY NAME NOTES NOTE NOTE NOTES TOTAL - ---------------------- ------------ ------------ ------------ ------------ ------------ CPHP-I Charter House $ 768,243 $ 1,704,847 $ -- $ -- $ 2,473,090 CPHP-II VOA/Sunset Park, Ltd. Sunset Park 2,162,532 7,574,722 -- 344,118 10,081,372 CPHP-III Highland Park 820,011 12,091,701 -- 216,088 13,127,800 CPHP-IV Forest Glen Estates 1,681,129 5,325,786 -- 65,701 7,072,616 CPHP-V Jaycee Towers 2,079,173 6,415,833 -- 264,703 8,759,709 CPHP-VI Edgewood 1,673,058 1,144,516 -- 226,939 3,044,513 CPHP-VII Gulfway Terrace 2,363,715 4,124,980 -- 287,806 6,776,501 CPHP-VIII Sunset Townhouses 512,383 996,143 -- 19,490 1,528,016 CPHP-IX Wind Ridge 3,033,677 839,369 -- 64,165 3,937,211 CPHP-X Bergen Circle 5,398,529 10,883,298 -- 832,612 17,114,439 CPHP-XI Continental Terrace 1,740,016 4,301,646 -- 440,260 6,481,922 CPHP-XII Yale Village 2,020,796 4,870,956 -- 1,773,625 8,665,377 CPHP-XIII Atlantis 1,784,244 7,448,792 -- 52,522 9,285,558 CPHP-XIV Kings Row 4,000,000 3,580,421 -- 499,909 8,080,330 CPHP-XV Castle Gardens 1,245,596 3,423,180 -- 326,190 4,994,966 CPHP-XVI Rockwell Villa 429,822 1,150,939 -- 62,636 1,643,397 CPHP-XVII London Square Village 1,825,053 2,860,083 -- 291,829 4,976,965 CPHP-XVIII Ascension Towers 2,768,123 6,980,507 -- 469,351 10,217,981 Coleman Manor Associates Limited Partnership Coleman Manor 2,114,663 -- -- 40,000 2,154,663 CPHP-XX Holiday Heights 770,294 2,605,474 -- -- 3,375,768 CPHP-XXII Harriet Tubman Terrace 1,241,931 5,800,762 221,500 -- 7,264,193 ------------ ------------ ------------ ------------ ------------ $ 40,432,988 $ 94,123,955 $ 221,500 $ 6,277,944 $141,056,387 ============ ============ ============ ============ ============
F-15 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION OF OPERATING PARTNERSHIPS IN WHICH CPHF-I HAS LIMITED PARTNERSHIP INTERESTS - CONTINUED DECEMBER 31, 2001 NOTE 3 - RECONCILIATION OF REAL ESTATE AND ACCUMULATED DEPRECIATION
ACCUMULATED COST DEPRECIATION ------------ ------------ Balance at December 31, 1998 $108,071,516 $ 44,753,576 Additions during year: Improvements 844,445 -- Depreciation -- 4,295,795 ------------ ------------ Balance at December 31, 1999 108,915,961 49,049,371 Additions during year: Improvements 580,382 -- Depreciation -- 4,290,578 ------------ ------------ Balance at December 31, 2000 109,496,343 53,339,949 Additions during year: Improvements 674,897 -- Depreciation -- 4,267,847 ------------ ------------ $110,171,240 $ 57,607,796 ============ ============
F-16 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- MORTGAGE LOANS ON REAL ESTATE OF OPERATING PARTNERSHIPS IN WHICH CPHF-I HAS LIMITED PARTNERSHIP INTERESTS DECEMBER 31, 2001 Schedule IV
MONTHLY PAYMENTS ORIGINAL FINAL TO MATURITY FACE CARRYING INTEREST MATURITY (NET OF HUD AMOUNT OF AMOUNT OF DESCRIPTION(1) RATE DATE SUBSIDY) MORTGAGE MORTGAGE(2) - -------------- ---------- ---------- ----------- ---------- ------------ First mortgages assumed by Operating Partnerships: Century Pacific Housing Partnership-I (CPHP-I) Charter House Dothan, Alabama 7% March 2013 $ 8,238 $ 1,325,700 $ 768,243 CPHP-II VOA/Sunset Park, Ltd. Sunset Park November Denver, Colorado 7% 2014 8,825 4,859,300 2,162,532 CPHP-III Highland Park December Topeka, Kansas 3% 2008 10,835 2,914,500 820,011 CPHP-IV Forest Glen Estates Kansas City, Kansas 7.5% April 2013 6,703 2,787,000 1,681,129 CPHP-VI 3% plus Edgewood treasury January Danville, Illinois bill rate 2013 18,928 2,360,000 1,673,058 CPHP-VII Gulfway Terrace New Orleans, Louisiana 7% June 2015 8,320 3,616,200 2,363,715 CPHP-IX Wind Ridge Wichita, Kansas 8.625% July 2010 23,800 3,060,000 3,033,677 CPHP-X Bergen Circle Springfield, Massachusetts 6.92% March 2018 4,818 7,381,100 5,398,529 CPHP-V Jaycee Towers September Dayton, Ohio 8.5% 2012 7,701 3,361,200 2,079,173 CPHP-VIII Sunset Townhouses September Newton, Kansas 8.5% 2012 1,864 828,300 512,383 ----------- ----------- ------------ BALANCE BROUGHT FORWARD 100,032 32,493,300 20,492,450 ----------- ----------- ------------
F-17 CENTURY PACIFIC HOUSING FUND-1 MORTGAGE LOANS ON REAL ESTATE OF OPERATING PARTNERSHIPS IN WHICH CPHF-I HAS LIMITED PARTNERSHIP INTERESTS DECEMBER 31, 2001 Schedule IV
MONTHLY PAYMENTS ORIGINAL FINAL TO MATURITY FACE CARRYING INTEREST MATURITY (NET OF HUD AMOUNT OF AMOUNT OF DESCRIPTION(1) RATE DATE SUBSIDY) MORTGAGE MORTGAGE(2) - -------------- -------- ------------ ------------ ------------ ------------ BALANCE BROUGHT FORWARD $ 100,032 $ 32,493,300 $ 20,492,450 CPHP-XI Continental Terrace Fort Worth, Texas 7% March 2013 8,636 3,002,600 1,740,016 CPHP-XII Yale Village December Houston, Texas 8.5% 2011 9,655 3,363,300 2,020,796 CPHP-XIII Atlantis Virginia Beach, Virginia 8.5% March 2012 7,336 2,946,500 1,784,244 CPHP-XIV Kings Row Houston, Texas 7.0% June 2015 22,595 4,000,000 4,000,000 CPHP-XV Castle Gardens Lubbock, Texas 8.5% June 2015 4,808 1,949,900 1,245,596 CPHP-XVI Rockwell Villa September Oklahoma City, Oklahoma 7% 2013 1,968 812,700 429,822 CPHP-XVII London Square Village Oklahoma City, Oklahoma 7.5% June 2012 8,020 3,153,900 1,825,053 CPHP-XVIII Ascension Towers Memphis, Tennessee 7% May 2015 9,671 4,290,000 2,768,123 Coleman Manor Associates Limited Partnership Coleman Manor Baltimore, Maryland 10% July 2029 12,545 2,365,000 2,114,663 CPHP-XX Holiday Heights Fort Worth, Texas 7% April 2014 3,272 1,252,700 770,294 CPHP-XXII Harriet Tubman Terrace Berkeley, California 7% October 2015 4,233 1,882,700 1,241,931 ------------ ------------ ------------ $ 192,771 $ 61,512,600 $ 40,432,988 ============ ============ ============
See notes to schedule F-18 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- MORTGAGE LOANS ON REAL ESTATE OF OPERATING PARTNERSHIPS IN WHICH CPHF-I HAS LIMITED PARTNERSHIP INTERESTS DECEMBER 31, 2001 Schedule IV
MONTHLY PAYMENTS ORIGINAL FINAL TO MATURITY FACE CARRYING INTEREST MATURITY (NET OF HUD AMOUNT OF AMOUNT OF DESCRIPTION(1) RATE DATE SUBSIDY) MORTGAGE MORTGAGE(2) - -------------- -------- ------------ ------------ ------------ ------------ Residual notes (second mortgages): Century Pacific Housing Partnership-I (CPHP-I) Charter House December Dothan, Alabama (1) 2002 (1) $ 781,581 $ 1,704,847 CPHP-II VOA/Sunset Park, Ltd. Sunset Park December Denver, Colorado (1) 2002 (1) 2,462,936 7,574,722 CPHP-III Highland Park December Topeka, Kansas (1) 2002 (1) 3,936,695 12,091,701 CPHP-IV Forest Glen Estates December Kansas City, Kansas (1) 2002 (1) 1,733,923 5,325,786 CPHP-VI Edgewood December Danville, Illinois (1) 2002 (1) 415,192 1,144,516 CPHP-VII Gulfway Terrace December New Orleans, Louisiana (1) 2002 (1) 1,255,000 4,124,980 CPHP-IX Wind Ridge December Wichita, Kansas (1) 2003 (1) 1,053,084 839,369 CPHP-X Bergen Circle Springfield, Massachusetts (1) July 2013 (1) 3,547,072 10,883,298 CPHP-V Jaycee Towers Dayton, Ohio (1) October 2005 (1) 2,245,673 6,415,833 CPHP-VIII Sunset Townhouses Newton, Kansas (1) August 2003 (1) 341,229 996,143 ------------ ------------ BALANCE BROUGHT FORWARD 17,772,385 51,101,195 ------------ ------------
F-19 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- MORTGAGE LOANS ON REAL ESTATE OF OPERATING PARTNERSHIPS IN WHICH CPHF-I HAS LIMITED PARTNERSHIP INTERESTS DECEMBER 31, 2001 Schedule IV
MONTHLY PAYMENTS ORIGINAL FINAL TO MATURITY FACE CARRYING INTEREST MATURITY (NET OF HUD AMOUNT OF AMOUNT OF DESCRIPTION(1) RATE DATE SUBSIDY) MORTGAGE MORTGAGE(2) - -------------- -------- ------------ ------------ ------------ ------------ BALANCE BROUGHT FORWARD $ 17,772,385 $ 51,101,195 CPHP-XI Continental Terrace Fort Worth, Texas (1) October 2003 (1) 1,595,364 4,301,646 CPHP-XII Yale Village Houston, Texas (1) August 2003 (1) 1,255,000 4,870,956 CPHP-XIII Atlantis Virginia Beach, Virginia (1) July 2003 (1) 2,552,584 7,448,792 CPHP-XIV Kings Row Houston, Texas (1) August 2003 (1) 1,537,518 3,580,421 CPHP-XV Castle Gardens Lubbock, Texas (1) July 2003 (1) 1,160,247 3,423,180 CPHP-XVI Rockwell Villa Oklahoma City, Oklahoma (1) July 2003 (1) 398,629 1,150,939 CPHP-XVII London Square Village Oklahoma City, Oklahoma (1) July 2003 (1) 979,071 2,860,083 CPHP-XVIII Ascension Towers Memphis, Tennessee (1) August 2003 (1) 2,404,667 6,980,507 CPHP-XX Holiday Heights Fort Worth, Texas (1) October 2004 (1) 909,472 2,605,474 CPHP-XXII Harriet Tubman Terrace December Berkeley, California (1) 2003 (1) 2,036,000 5,800,762 ------------ ------------ $ 32,600,937 $ 94,123,955 ============ ============
See notes to schedule F-20 CENTURY PACIFIC HOUSING FUND-1 - -------------------------------------------------------------------------------- NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE OF OPERATING PARTNERSHIPS IN WHICH CPHF-I HAS LIMITED PARTNERSHIP INTERESTS DECEMBER 31, 2001 NOTE 1 - DESCRIPTION Each Operating Partnership has invested in a Property. The Operating Partnerships assumed mortgage loan obligations from the sellers of the properties, and with the exception of two mortgages, all mortgage loan obligations are insured by the United States Department of Housing and Urban Development. All mortgages are secured by the land and buildings of the properties. In addition, the Operating Partnerships issued residual notes to the sellers of the properties as partial consideration. The notes bear interest at the minimum long-term federal rate as announced from time-to-time pursuant to Section 1274 of the Internal Revenue Code, provided that such rate shall not be less than 7% nor greater than 15%. The notes are secured by the land and buildings of the properties. The notes are repayable out of future cash available for distribution and unpaid principal and interest are due at maturity. NOTE 2 - RECONCILIATION OF MORTGAGES AND RESIDUAL NOTES
FOR THE YEAR ENDED DECEMBER 31, 2001 ---------------------------- MORTGAGE RESIDUAL LOANS NOTES ------------ ------------ Balance at December 31, 1998 $ 41,234,855 $ 77,235,906 Additions during year: Accrued interest -- 7,028,848 Deductions during year: Payments (2,240,789) -- ------------ ------------ Balance at December 31, 1999 38,994,066 84,264,754 Additions during year: Accrued interest -- 7,119,427 New mortgage loan 3,060,000 -- Deductions during year: Payments (2,806,929) (2,044,850) ------------ ------------ Balance at December 31, 2000 39,247,137 89,339,331 Additions during year: Accrued interest -- 7,417,773 New mortgage loan 4,000,000 -- Deductions during year: Payments (2,814,149) (2,633,149) ------------ ------------ $ 40,432,988 $ 94,123,955 ============ ============
F-21 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CENTURY PACIFIC HOUSING FUND - I By: Irwin Jay Deutch, as Managing General Partner Date: July 15, 2002 /s/ IRWIN JAY DEUTCH ----------------------------------------- and Century Pacific Capital I Corporation, as Corporate General Partner and as Attorney-in-Fact for all Investor Limited Partners Date: July 15, 2002 /s/ IRWIN JAY DEUTCH ------------------------------------- By: Irwin Jay Deutch, President 16 S2100-020 INDEPENDENT AUDITORS' REPORT To The Partners Coleman Manor Associates Limited Partnership We have audited the accompanying balance sheet of Coleman Manor Associates Limited Partnership, Project No. 052-35464, a limited partnership, as of December 31, 1999 and the related statements of profit and loss, partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Coleman Manor Associates Limited Partnership as of December 31, 1999 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. January 27, 2000 COLEMAN MANOR ASSOCIATES LIMITED PARTNERSHIP 052-35464 - -------------------------------------------------------------------------------- BALANCE SHEET PAGE 1 OF 2 DECEMBER 31, 1999 ASSETS CURRENT ASSETS 1120 Cash - operations $ 6,814 1130 Tenant accounts receivable 1,939 1135 Accounts receivable - HUD 8,345 1200 Miscellaneous prepaid expenses 21,805 ------------ 1100T TOTAL CURRENT ASSETS $ 38,903 DEPOSITS HELD IN TRUST - FUNDED 1191 Tenant deposits held in trust 6,652 RESTRICTED DEPOSITS AND FUNDED RESERVES 1310 Escrow deposits 28,943 1320 Replacement reserve 40,527 ------------ 1300T TOTAL DEPOSITS 69,470 FIXED ASSETS 1410 Land 61,281 1420 Buildings 3,426,317 1465 Office furniture and equipment 123,514 ------------ 1400T Total Fixed Assets 3,611,112 1495 Less: Accumulated depreciation 1,466,857 ------------ 1400N NET FIXED ASSETS 2,144,255 OTHER ASSETS 1520 Intangible assets - loan costs 1520 Intangible assets - credit application and 97,875 compliance fees 11,844 ------------ 1500T TOTAL OTHER ASSETS 109,719 ------------ 1000T TOTAL ASSETS $2,368,999 ============
- -------------------------------------------------------------------------------- See the accompanying notes to financial statements. Page 2 COLEMAN MANOR ASSOCIATES LIMITED PARTNERSHIP 052-35464 - -------------------------------------------------------------------------------- BALANCE SHEET PAGE 2 OF 2 DECEMBER 31, 1999 LIABILITIES CURRENT LIABILITIES 2105 Bank overdraft - operations $ 398 2110 Accounts payable - operations 6,366 2120 Accrued wages payable 2,311 2113 Accounts payable - entity 186,454 2123 Accrued management fee payable 1,839 2131 Accrued interest payable - first mortgage 14,889 2170 Mortgage payable - first mortgage (short-term) 8,559 2172 Mortgage payable - second mortgage (short-term) 1,382 2210 Prepaid revenue 1,337 ------------ 2122T TOTAL CURRENT LIABILITIES $ 223,535 DEPOSIT AND PREPAYMENT LIABILITIES 2191 Tenant deposits held in trust (contra) 6,638 LONG-TERM LIABILITIES 2320 Mortgage payable - first mortgage 1,415,101 2322 Mortgage payable - second mortgage 710,421 2324 Other loans and notes payable 40,000 ------------ 2300T TOTAL LONG-TERM LIABILITIES 2,165,522 ------------ 2000T TOTAL LIABILITIES 2,395,695 PARTNERS' EQUITY (DEFICIT) 3130 Partners' equity (deficit) (26,696) ------------ 2033T TOTAL LIABILITIES AND PARTNERS' EQUITY (DEFICIT) $2,368,999 ============
- -------------------------------------------------------------------------------- See the accompanying notes to financial statements. Page 3 COLEMAN MANOR ASSOCIATES LIMITED PARTNERSHIP 052-35464 - -------------------------------------------------------------------------------- STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------------------------------------------- PART 1 DESCRIPTION OF ACCOUNT ACCT. NO. AMOUNT - --------------------------------------------------------------------------------------------------------------------- Rent Revenue - Gross Potential 5120 $ 44,692 -------------------------------------------------------------------------------------------------- Tenant Assistance Payments 5121 $330,202 -------------------------------------------------------------------------------------------------- Rent Revenue - Stores and Commercial 5140 $ -------------------------------------------------------------------------------------------------- Garage and Parking Spaces 5170 $ -------------------------------------------------------------------------------------------------- Flexible Subsidy Revenue 5180 $ RENT -------------------------------------------------------------------------------------------------- REVENUE Miscellaneous Rent Revenue 5190 $ 5100 -------------------------------------------------------------------------------------------------- Excess Rent 5191 $ -------------------------------------------------------------------------------------------------- Rent Revenue/Insurance 5192 $ -------------------------------------------------------------------------------------------------- Special Claims Revenue 5193 $ -------------------------------------------------------------------------------------------------- Retained Excess Income 5194 $ -------------------------------------------------------------------------------------------------- TOTAL RENT REVENUE 5100T $ 374,894 - --------------------------------------------------------------------------------------------------------------------- Apartments 5220 $ 5,983 -------------------------------------------------------------------------------------------------- Stores and Commercial 5240 $ -------------------------------------------------------------------------------------------------- Rental Concessions 5250 $ VACANCIES -------------------------------------------------------------------------------------------------- 5200 Garage and Parking Space 5270 $ -------------------------------------------------------------------------------------------------- Miscellaneous 5290 $ -------------------------------------------------------------------------------------------------- TOTAL VACANCIES 5200T $ 5,983 -------------------------------------------------------------------------------------------------- NET RENTAL REVENUE Rent Revenue Less Vacancies 5152N $ 368,911 - --------------------------------------------------------------------------------------------------------------------- 5300 Nursing Homes/Assisted Living/Board and Care/ Other Elderly Care/Coop/ and Other Revenues 5300 $ - --------------------------------------------------------------------------------------------------------------------- Financial Revenue - Project Operations 5410 $ 446 -------------------------------------------------------------------------------------------------- Revenue from Investments - Residual Receipts 5430 $ FINANCIAL -------------------------------------------------------------------------------------------------- REVENUE Revenue from Investments - Replacement Reserve 5440 $ 797 5400 -------------------------------------------------------------------------------------------------- Revenue from Investments - Miscellaneous 5490 $ -------------------------------------------------------------------------------------------------- TOTAL FINANCIAL REVENUE 5400T $ 1,243 - --------------------------------------------------------------------------------------------------------------------- Laundry and Vending Revenue 5910 $ 1,627 -------------------------------------------------------------------------------------------------- Tenant Charges 5920 $ 1,316 -------------------------------------------------------------------------------------------------- Interest Reduction Payments Revenue 5945 $ OTHER -------------------------------------------------------------------------------------------------- REVENUE Miscellaneous Revenue (Schedule) 5990 $ 3,789 5900 -------------------------------------------------------------------------------------------------- TOTAL OTHER REVENUE 5900T $ 6,732 -------------------------------------------------------------------------------------------------- TOTAL REVENUE 5000T $ 376,886 - --------------------------------------------------------------------------------------------------------------------- Conventions and Meetings 6203 $ -------------------------------------------------------------------------------------------------- Management Consultants 6204 $ -------------------------------------------------------------------------------------------------- Advertising and Marketing 6210 $ 93 -------------------------------------------------------------------------------------------------- Other Renting Expenses 6250 $ 4,180 -------------------------------------------------------------------------------------------------- Office Salaries 6310 $ 17,799 -------------------------------------------------------------------------------------------------- Office Expenses 6311 $ 7,368 -------------------------------------------------------------------------------------------------- Office or Model Apartment Rent 6312 $ -------------------------------------------------------------------------------------------------- Management Fee 6320 $ 21,943 ADMINISTRATIVE -------------------------------------------------------------------------------------------------- EXPENSES Manager or Superintendent Salaries 6330 $ 6200/6300 -------------------------------------------------------------------------------------------------- Administrative Rent Free Unit 6331 $ 7,477 -------------------------------------------------------------------------------------------------- Legal Expense - Project 6340 $ 174 -------------------------------------------------------------------------------------------------- Audit Expense 6350 $ 6,000 -------------------------------------------------------------------------------------------------- Bookkeeping Fees/Accounting Services 6351 $ 4,925 -------------------------------------------------------------------------------------------------- Bad Debts 6370 $ 243 -------------------------------------------------------------------------------------------------- Miscellaneous Administrative Expenses 6390 $ 1,421 -------------------------------------------------------------------------------------------------- TOTAL ADMINISTRATIVE EXPENSES 6263T $ 71,623 - --------------------------------------------------------------------------------------------------------------------- Fuel Oil/Coal 6420 $ -------------------------------------------------------------------------------------------------- Electricity 6450 $ 8,104 UTILITIES -------------------------------------------------------------------------------------------------- EXPENSE Water 6451 $ 1,325 6400 -------------------------------------------------------------------------------------------------- Gas 6452 $ -------------------------------------------------------------------------------------------------- Sewer 6453 $ 2,959 -------------------------------------------------------------------------------------------------- TOTAL UTILITIES EXPENSE 6400T $ 12,388 -------------------------------------------------------------------------------------------------- TOTAL EXPENSES (CARRY FORWARD TO PAGE 2) $ 84,011 - ---------------------------------------------------------------------------------------------------------------------
Page 1 of 2 - -------------------------------------------------------------------------------- See the accompanying notes to financial statements. Page 4
Project Name: Coleman Manor Associates Limited Partnership - --------------------------------------------------------------------------------------------------------------------- BALANCE CARRIED FORWARD $ 84,011 - --------------------------------------------------------------------------------------------------------------------- Payroll 6510 $ 30,806 -------------------------------------------------------------------------------------------------- Supplies 6515 $ 641 -------------------------------------------------------------------------------------------------- Contracts 6520 $ 16,970 -------------------------------------------------------------------------------------------------- Operating and Maintenance Rent Free Unit 6521 $ -------------------------------------------------------------------------------------------------- Garbage and Trash Removal 6525 $ 1,980 OPERATING -------------------------------------------------------------------------------------------------- MAINTENANCE Security Payroll/Contract 6530 $ EXPENSES -------------------------------------------------------------------------------------------------- 6500 Security Rent Free Unit 6531 $ -------------------------------------------------------------------------------------------------- Heating/Cooling Repairs and Maintenance 6546 $ 6,760 -------------------------------------------------------------------------------------------------- Snow Removal 6548 $ 150 -------------------------------------------------------------------------------------------------- Vehicle and Maintenance Equipment Operation and Repairs 6570 $ -------------------------------------------------------------------------------------------------- Miscellaneous Operating and Maintenance Expenses 6590 $ 5,992 -------------------------------------------------------------------------------------------------- TOTAL OPERATING AND MAINTENANCE EXPENSES 6500T $ 63,299 - --------------------------------------------------------------------------------------------------------------------- Real Estate Taxes 6710 $ 34,458 -------------------------------------------------------------------------------------------------- Payroll Taxes (Project's Share) 6711 $ 4,284 -------------------------------------------------------------------------------------------------- Property and Liability Insurance (Hazard) 6720 $ 5,655 -------------------------------------------------------------------------------------------------- TAXES Fidelity Bond Insurance 6721 $ AND -------------------------------------------------------------------------------------------------- INSURANCE Workmen's Compensation 6722 $ 830 6700 -------------------------------------------------------------------------------------------------- Health Insurance and Other Employee Benefits 6723 $ 3,956 -------------------------------------------------------------------------------------------------- Miscellaneous Taxes, Licenses, Permits and Insurance 6790 $ 1,315 -------------------------------------------------------------------------------------------------- TOTAL TAXES AND INSURANCE 6700T $ 50,498 - --------------------------------------------------------------------------------------------------------------------- Interest on Mortgage Payable 6820 $142,798 -------------------------------------------------------------------------------------------------- Interest on Notes Payable (LongTerm) 6830 $ 7,123 FINANCIAL -------------------------------------------------------------------------------------------------- EXPENSES Interest on Notes Payable (ShortTerm) 6840 $ 6800 -------------------------------------------------------------------------------------------------- Mortgage Insurance Premium/Service Charge 6850 $ 7,153 -------------------------------------------------------------------------------------------------- Miscellaneous Financial Expenses 6890 $ -------------------------------------------------------------------------------------------------- TOTAL FINANCIAL EXPENSES 6800T $ 157,074 - --------------------------------------------------------------------------------------------------------------------- 6900 Nursing Homes/ Assisted Living/ Board and Care/ Other Elderly Care Expenses 6900 $ - --------------------------------------------------------------------------------------------------------------------- TOTAL COST OF OPERATIONS BEFORE DEPRECIATION AND AMORTIZATION 6000T $ 354,882 -------------------------------------------------------------------------------------------------- PROFIT (LOSS) BEFORE DEPRECIATION AND AMORTIZATION 5060T $ 22,004 -------------------------------------------------------------------------------------------------- Depreciation Expense 6600 $135,085 -------------------------------------------------------------------------------------------------- Amortization Expense 6610 $ 6,580 -------------------------------------------------------------------------------------------------- TOTAL DEPRECIATION AND AMORTIZATION $ 141,665 -------------------------------------------------------------------------------------------------- OPERATING PROFIT OR (LOSS) 5060N $(119,661) - --------------------------------------------------------------------------------------------------------------------- Officer's Salaries 7110 $ -------------------------------------------------------------------------------------------------- Legal Expenses 7120 $ -------------------------------------------------------------------------------------------------- Federal, State, and Other Income Taxes 7130 $ -------------------------------------------------------------------------------------------------- CORPORATE OR Interest Income 7140 $ MORTGAGOR -------------------------------------------------------------------------------------------------- ENTITY Interest on Notes Payable 7141 $ EXPENSES -------------------------------------------------------------------------------------------------- 7100 Interest on Mortgage Payable 7142 $ -------------------------------------------------------------------------------------------------- Other Expenses (Schedule) 7190 $ 19,800 -------------------------------------------------------------------------------------------------- NET ENTITY EXPENSES 7100T $ 19,800 -------------------------------------------------------------------------------------------------- PROFIT OR LOSS (NET INCOME OR LOSS) 3250 $(139,461) - --------------------------------------------------------------------------------------------------------------------- MISCELLANEOUS OR OTHER INCOME AND EXPENSE SUB-ACCOUNT GROUPS. If miscellaneous or other income and/or expense sub-accounts (5190, 5290, 5490, 5990, 6390, 6590, 6790, 6890 and 7190) exceed the Account Groupings by 10% or more, attach a separate schedule describing or explaining the miscellaneous income or expense. - --------------------------------------------------------------------------------------------------------------------- PART II - --------------------------------------------------------------------------------------------------------------------- 1. Total mortgage principal payments required during the audit year (12 monthly payments). This applies to all direct loans and HUD-held and fully insured mortgages. Any HUD approved second mortgages should be included in the figures. (Account S1000-010) $ 9,120 - --------------------------------------------------------------------------------------------------------------------- 2. Total of 12 monthly deposits in the audit year into the Replacement Reserve account, as required by the Regulatory Agreement even if payments may be temporarily suspended or reduced. (Account S1000-020) $ 5,910 - --------------------------------------------------------------------------------------------------------------------- 3. Replacement Reserve or Residual Receipts releases which are included as expense items on this Profit and Loss Statement. (Account S1000-030) $ - --------------------------------------------------------------------------------------------------------------------- 4. Project Improvement Reserve Releases under the Flexible Subsidy Program that are included as expense items on this Profit and Loss Statement. (Account S1000-040) $ - ---------------------------------------------------------------------------------------------------------------------
Page 2 of 2 - -------------------------------------------------------------------------------- See the accompanying notes to financial statements. Page 5 COLEMAN MANOR ASSOCIATES LIMITED PARTNERSHIP 052-35464 - ------------------------------------------------------------------------------ SCHEDULE OF SUB-ACCOUNTS FOR THE YEAR ENDED DECEMBER 31, 1999 5990 - MISCELLANEOUS REVENUE 5990-010 Recovery of bad debts 5990-020 $ 3,500 5990-010 Miscellaneous revenue 5990-020 289 --------- 5990 TOTAL MISCELLANEOUS REVENUE $ 3,789 ========= 7190 OTHER EXPENSES 7190-010 Supervisory management fee 7190-020 $19,800 =========
- ------------------------------------------------------------------------------ See the accompanying notes to financial statements. Page 6a COLEMAN MANOR ASSOCIATES LIMITED PARTNERSHIP 052-35464 - ------------------------------------------------------------------------------ STATEMENT OF PARTNERS' EQUITY (DEFICIT) FOR THE YEAR ENDED DECEMBER 31, 1999 S1100-010 BEGINNING OF YEAR $ 112,765 3250 NET LOSS (139,461) ----------- 3130 END OF YEAR $ (26,696) ===========
- ------------------------------------------------------------------------------ See the accompanying notes to financial statements. Page 7 COLEMAN MANOR ASSOCIATES LIMITED PARTNERSHIP 052-35464 - -------------------------------------------------------------------------------- STATEMENT OF CASH FLOWS PAGE 1 OF 2 FOR THE YEAR ENDED DECEMBER 31, 1999
ACCOUNT AMOUNT -------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Receipts: S1200-010 Rental receipts $ 362,437 S1200-020 Interest receipts 1,243 S1200-030 Other operating receipts 6,732 ----------- S1200-040 Total Receipts 370,412 ----------- Disbursements: S1200-050 Administrative 30,756 S1200-070 Management fee 22,536 S1200-090 Utilities 12,388 S1200-100 Salaries and wages 48,406 S1200-110 Operating and maintenance 32,493 S1200-120 Real estate taxes 32,379 S1200-140 Property insurance 12,134 S1200-150 Miscellaneous taxes and insurance 4,284 S1200-160 Tenant security deposits 287 S1200-180 Interest on mortgages 142,868 S1200-210 Mortgage insurance premium (MIP) 7,130 S1200-220 Miscellaneous financial 7,123 ----------- S1200-230 Total Disbursements 352,784 ----------- S1200-240 NET CASH PROVIDED BY OPERATING ACTIVITIES 17,628 ----------- CASH FLOWS FROM INVESTING ACTIVITIES S1200-245 Net deposits to the mortgage escrow account (8,534) S1200-250 Net deposits to the reserve for replacement account (6,707) S1200-330 Net purchases of fixed assets (4,880) ----------- S1200-350 NET CASH USED IN INVESTING ACTIVITIES (20,121) ----------- CASH FLOWS FROM FINANCING ACTIVITIES S1200-360 Mortgage principal payments (9,120) S1200-450 Other financing activities 398 S1200-455 Entity/Construction financing activities: S1200-456 Supervisory management fees S1200-457 (3,000) ----------- S1200-460 NET CASH USED IN FINANCING ACTIVITIES (11,722) ----------- S1200-470 NET DECREASE IN CASH (14,215) S1200-480 BEGINNING OF PERIOD CASH 21,029 ----------- S1200T END OF PERIOD CASH $ 6,814 ===========
- -------------------------------------------------------------------------------- See the accompanying notes to financial statements. Page 8 COLEMAN MANOR ASSOCIATES LIMITED PARTNERSHIP 052-35464 - -------------------------------------------------------------------------------- STATEMENT OF CASH FLOWS PAGE 2 OF 2 FOR THE YEAR ENDED DECEMBER 31, 1999
ACCOUNT AMOUNT -------------------------- RECONCILIATION OF NET LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES 3250 Net loss $(139,461) Adjustments to reconcile net loss to net cash provided by operating activities: 6600 Depreciation 135,085 6610 Amortization 6,580 Change in assets and liabilities: S1200-490 Increase in tenant accounts receivable (1,573) S1200-500 Decrease in accounts receivable - other (5,824) S1200-520 Decrease in prepaid expenses 1,724 S1200-530 Increase in cash restricted for tenant security deposits (270) S1200-540 Increase in accounts payable 1,125 S1200-560 Decrease in accrued liabilities (394) S1200-570 Decrease in accrued interest payable (70) S1200-580 Decrease in tenant security deposits held in trust (17) S1200-590 Increase in prepaid revenue 923 S1200-605 Increase in entity/construction liability accounts S1200-606 Management fee expense S1200-607 19,800 ----------- S1200-610 NET CASH PROVIDED BY OPERATING ACTIVITIES $ 17,628 ===========
- -------------------------------------------------------------------------------- See the accompanying notes to financial statements. Page 9 COLEMAN MANOR ASSOCIATES LIMITED PARTNERSHIP 052-35464 - ------------------------------------------------------------------------------ NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (S3100-010) The Partnership is organized as a limited partnership formed under the laws of the State of Maryland on May 16, 1988 to acquire an interest in .723 acres of land in Baltimore City, Maryland, and to construct and operate thereon an apartment complex of 50 units under Section 221(d)(3) of the National Housing Act. Such projects are regulated by the U.S. Department of Housing and Urban Development (HUD) as to rent charges and operating methods. The regulatory agreements limit annual distributions of net operating receipts to "surplus cash" available at the end of each year. There was no "surplus cash" as of December 31, 1999. The following significant accounting policies have been followed in the preparation of the financial statements: Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The Partnership provides an allowance for doubtful accounts equal to the estimated collection losses that will be incurred in collection of all receivables. The estimated losses are based on a review of the current status of the existing receivables. No allowance for doubtful accounts was provided for at December 31, 1999 as none was deemed necessary by management. Depreciation is provided using primarily the straight-line method over the estimated useful lives of the assets ranging from seven to twenty-seven years. The replacement reserve can only be used for improvements to buildings upon prior approval of HUD. - ------------------------------------------------------------------------------ Page 10 COLEMAN MANOR ASSOCIATES LIMITED PARTNERSHIP - ------------------------------------------------------------------------------ Notes To Financial Statements (Continued) Deferred loan costs consist of fees for obtaining the HUD insured mortgage loan and are being amortized using the straight-line method over the life of the mortgage loan. The low income credit application fee and the low income credit compliance fee are being amortized over 15 years, the term of the credit compliance period. Income or loss of the Partnership is allocated 2% to the general partners and 98% to the limited partners. No income tax provision has been included in the financial statements since income or loss of the Partnership is required to be reported by the partners on their respective income tax returns. 2. MORTGAGES PAYABLE (S3100-050) Permanent financing of the project has been provided by three mortgages. The related notes are nonrecourse and are secured by the Partnership's real estate. The first mortgage is insured by the Federal Housing Administration (FHA) and collateralized by a deed of trust on the rental property. The mortgage bears interest at a rate of 10% and is payable in monthly installments of $12,545 (including principal and interest) through July 2029. Under agreements with the mortgage lender and FHA, the Partnership is required to make monthly escrow deposits for taxes, insurance and replacement of project assets, and is subject to restrictions as to operating policies, rental charges, operating expenditures and distributions to partners. The liability of the Partnership under the mortgage note is limited to the underlying value of the real estate collateral plus other amounts deposited with the lender. SUBORDINATED MORTGAGE PAYABLE The second mortgage, a variable interest loan through Community Development Administration (CDA) of Maryland, is serviced by Bogman, Inc. The note matures on July 1, 2029 and is payable as follows: 1. Beginning August 1, 1990, fifteen annual payments of $8,500 are due, which includes interest at 1% annum. - ------------------------------------------------------------------------------ Page 11 COLEMAN MANOR ASSOCIATES LIMITED PARTNERSHIP - ------------------------------------------------------------------------------ Notes To Financial Statements (Continued) 2. Beginning August 1, 2005, annual payments are due including interest at 10%, in an amount sufficient to amortize the principal balance over the remaining term of the loan. SUBORDINATED PURCHASE MONEY MORTGAGE PAYABLE This mortgage is with the Mayor and City Council of Baltimore and is non-interest bearing. The full balance is due on September 1, 2029. The scheduled maturities of the mortgages payable at December 31, 1999 are as follows: (S3100-x1x)
YEAR ACCOUNT AMOUNT -------------------------------------------------------------- 2000 S3100-060 $ 9,941 2001 S3100-070 10,851 2002 S3100-080 11,855 2003 S3100-090 12,963 2004 S3100-100 14,185 Thereafter S3100-110 2,115,668 -------------------------------------------------------------- $2,175,463 ==============================================================
3. COMMITMENTS (S3100-X3X) (S3100-240) The Partnership has entered into a regulatory agreement with HUD which regulates, among other things, the rents which may be charged for apartment units in the project, prohibits the sale of the Project without HUD consent, limits the annual distribution of cash flow to the partners and otherwise regulates the relationship between the Partnership and HUD. 4. RELATED PARTY TRANSACTIONS (S3100-200) ASSET AND SUPERVISORY MANAGEMENT FEE (S3100-200) The Project has a management agreement with Century Pacific Realty Corporation (CPRC), the supervising general partner, which requires a fee of $19,800 annually. The first portion of the fee ($3,000) is to be paid out of operations. The second portion ($5,000) is to be paid out of surplus cash (as defined by HUD). The remaining balance and any unpaid portions of the above may be paid out of capital transactions. As of December 31, 1999, $186,454 of this fee remains unpaid. - ------------------------------------------------------------------------------ Page 12 COLEMAN MANOR ASSOCIATES LIMITED PARTNERSHIP - ------------------------------------------------------------------------------ Notes To Financial Statements (Continued) INCENTIVE MANAGEMENT FEE (S3100-200) The Project has an incentive management agreement with the managing general partner. The fee is to be equal to 60% of surplus cash (as defined by HUD) net of the second portion ($5,000) of the asset and supervisory management fee. There were no fees charged nor payments made related to this fee in 1999. S3100-210 COMPANY NAME Century Pacific Realty Corporation S3100-220 AMOUNT RECEIVED $3,000 S3100-210 COMPANY NAME Mt. Washington Management Group, Inc. S3100-220 AMOUNT RECEIVED $27,461 MANAGEMENT FEE (S3100-230) Mt. Washington Management Group, Inc., an affiliate of the general partners, is the exclusive agent for the management of the property. The current management agreement provides for a management fee equal to 6.14% of gross collections. Total management fees incurred during 1999 were $21,943. In addition, Mt. Washington Management Group, Inc. collects an accounting and bookkeeping fee which amounted to $4,925 in 1999. At December 31, 1999, $1,839 of these amounts are due and payable. 5. LOW-INCOME HOUSING TAX CREDITS (S3100-240) The Partnership expects to generate an aggregate of $2,545,410 of low-income housing tax credits. Generally, such credits are expected to become available for use by its partners pro rata over a ten-year period beginning in 1989. In order to qualify for these credits, the Property must comply with various federal and state requirements. These requirements, include, but are not limited to, renting to low-income tenants at rental rates, which do not exceed specified percentages of area median gross income for the first 15 years of operation. - ------------------------------------------------------------------------------ Page 13 -----END PRIVACY-ENHANCED MESSAGE-----